Copyright Review Commission and Music Rights

Despite the Ministers satisfaction with the Copyright Review Commission (CRC) Report, the South African music industry is a long way from transparency and transformation.

The Copyright Review Commission (CRC) was established by the Department of Trade and Industry (DTI) to inter alia assess concerns and allegations about the collecting society’s model.

In a statement on April 13th Minister of Trade and Industry (DTI), Dr Rob Davies said, “The findings or recommendations of CRC in the main are mainly negative and go against the current regime of management of collecting societies.”

The collection society 'market’ in South Africa is worth approximately R750 million per annum. It is ruled by SAMRO which collects nearly 2/3rds of the market through its ownership of the performing rights of all its composer members. The other third is shared between Composers Authors & Publishers Association (CAPASSO) collecting on mechanical (reproduction) rights, and the South African Music Performance Rights (SAMPRA) collecting sound recording owner (record label) communication to the public rights.

Ms C Theko (ANC) said, “Collecting societies should be seen as another way of unifying the fragmented creative sectors. When they are unified, they are likely to share the same strategic and developmental goals. If they remain fragmented, there is a likelihood of advocating different positions, and this would not change the status quo.”

As a member of international rights organizations, CISAC and BIEM, SAMRO has a well established international network. To have one place for all licencing is potentially a good structure.

The 224 page CRC Report made four conclusions and two key recommendations each containing 22 and 24 points respectively. None of the four conclusions mentioned collecting societies.

A focal recommendation was shifting the industry in the direction of one collecting society for performance rights, one collecting society for sound recording rights, and one collecting society for mechanical rights, however this process was not transparent.

“SAMRO owns and with all matter of encouragement from DTI, has taken ownership of three different sets of rights.” Multi-jurisdictional copyright lawyer Graeme Gilfillan

Many crucial CRC recommendations have been ignored: “SAMRO must seek mandate from members prior to utilising cash resources; SAMRO’s requirement that full members need to be approved by the board is inappropriate, and SAMROs distribution of unallocated royalties is unacceptable."

Over the years SAMRO has spent tens of millions in SAMRO member’s money driving the change of the CMO regime to include a new SAMPRA and CAPASSO under their umbrella.

As am implementing arm of the DTI, the Companies and Intellectual Property Commission CIPC was tasked to play the central role in the regulation and accreditation of the industry.

Since the promulgation of Collecting Society Regulations in 2006, the Registrar of Copyright accredited three societies to collect royalties for sound recordings, namely SAMPRA, SARRAL and SAMRO. SAMRO escaped regulation in 2006. Only SAMPRA and AIRCO (now Independent Music Performance Rights Association) are regulated as sound recording owners in so far as needle-time rights are concerned.

Kadi Petje, Senior Manager: Copyright, CIPC said, “Application of the law is our only mandate in so far as IP law/policy is concerned. All our regulatory interventions are entrenched in the applicable IP statutes and the Constitution.”

Davies’s statement that “The CRC was constituted by persons who are experts in the area of Copyright and Intellectual Property,” is incorrect. Members of the CRC included Judge Ian Farlam, Oupa Lebogo, secretary of the Creative Workers Union of South Africa, Nala Mhlongo Chartered Accountant, Prof. Tana Pistorius intellectual property lecturer at the University of South Africa, Dr Jean Swanson-Jacobs Policy analyst and Prof. Musa Xulu a disgraced politician.

Gilfillan advised, “The CRC cannot and has not been implemented because it was corrupted at the outset. The recommendations in the main supported the reinforcement of existing unregulated apartheid era monopolies and scape-goated as economically irrelevant, black power. Submissions and interviews which would have had a material difference in the key recommendations were excised from the report.”

To exacerbate the strangle-hold on the industry, the Copyright Bill Subcommittee: regulation of Collecting Societies, appointed a technical panel comprising of 5/7 members of CMOs; namely Adv Joel Baloyi (nominated to SAMRO), Adv Ntsietso Mokitimi-Makhofola (nominated to SAMPRA), Thabang Mathibe (trustee at AIRCO) and Andre Myburgh (legal advisor at SAMRO) and nominated Wiseman Ngubo (CAPASSO).

Wiseman Ngubo, CAPASSO Business Affairs Manager echoed the Ministers satisfaction. He said, “The report did not favour CMOs but in fact made all the necessary recommendations that CMOs needed to change in order to better service their members.”

The CRC report recommended that the CMOs were under-licensing. It stated that the CMOs needed to increase licensing activities and set a one billion rand annual license fee target. Increasing licence rates and extending legislation to include the regulation of all CMOs were suggested for growth.

CRC recommendations failed to address the current international copyright considerations regarding the internet, online contracts, the ubiquitous use of the smartphone and the key issue of access to the authorship and ownership data of South African songs, recordings, films, books and artistic works.

“The key conclusions did not accord with any understanding of the copyright law global landscape. The report does not include "data", "databases", "hosting", "linking" "safe harbour" and other essential parts of the copyright landscape today. All copyright works are used, traded, distributed and paid for with and by data. In 2018 to exclude data would render the new Bill prima facie unfit for purpose,” said Gilfillan.

Other countries such as Ireland, Australia, Canada, Nigeria, Kenya, Hong Kong, India, the EU and the US are amending their respective copyright acts. The EU General Data Protection Regulation (GDPR), designed to harmonize data privacy laws across Europe and protect all EU citizens is shortly to enter law.

"It is departments of justice and other organs of state working in IP intellectual property and trade and industry, empowered by legislation, which are creating national settlements that are distributed to stakeholders and setting the rules of the game," pointed out Gilfillan.

Struan Douglas

Struan Douglas is a freelance writer and author based in South Africa.